Environmental Emissions and Health Spending in Sub-Saharan Africa: Does the Quality of Institutions have a role to play?

Introduction: This study investigates the direct and indirect effects of environmental and institutional quality on health expenditure in Sub-Saharan Africa between 2002 and 2021. It explores how various pollutants and climate factors influence different forms of health spending, and whether institutional quality moderates these relationships. Methods: Using panel data from Sub-Saharan African countries, the study employs a Fixed Effects estimation technique to analyze the impact of environmental indicators—including methane (NH₄), nitrous oxide (NO₂), greenhouse gas (GHG), and carbon dioxide (CO₂) emissions—alongside temperature trends and institutional quality indicators on total current health expenditure (CHE), public (PUHE), private (PrHE), external (EHE), and out-of-pocket (OHE) expenditures. Results: The findings reveal that NH₄, NO₂, and GHG emissions significantly increase all forms of health expenditure, though to varying degrees. CO₂ emissions are also positively associated with all forms of health spending except PUHE. Rising temperatures are particularly linked to increased PUHE. Institutional quality, especially government effectiveness, significantly moderates the effect of CO₂ on health expenditures across all models. Other institutional indicators—political stability, rule of law, regulatory quality, and voice and accountability—also moderate the relationship between pollution and health expenditure. Additionally, non-linear effects of environmental indicators are observed in specific models: NO₂ and GHG in PUHE; NH₄ and GHG in PrHE; NH₄ in OHE; and GHG in CHE. Discussion: The results underscore the multifaceted and context-dependent nature of environmental and institutional influences on health spending. Strong institutional frameworks can buffer or amplify the effects of environmental stressors on healthcare costs. Conclusion: Environmental degradation significantly drives health expenditures in Sub-Saharan Africa, and institutional quality plays a critical moderating role. Policymakers should integrate climate resilience strategies with governance reforms to manage the health-related costs of environmental change.